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Critical Factors to Successful Development

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It’s likely you have either committed certain common mistakes when developing a hotel or suffered the consequences of someone doing so. If this brings up painful memories, this article might be of interest.

Developing a hotel in this ever-changing market is quite a task, even for the most experienced owners. The multitude of different parties and contractors required is overwhelming and successfully orchestrating such a project is no less than an art. Aligning their interests would be the obvious strategy, but that can be difficult given the diversity of their personalities and key-motivators involved.

Watching interior designers and general contractors communicate can be painful and evoke the desire to engage couples therapy. Their scopes of work (and sometimes dispositions) are quite different. One lives in a world of material pallets, guest experience and operational flow, with little exposure to hard budgets. The other converts raw materials into hard building structures, usually under pressure to meet a rigorous budget and schedule.

Check-in desk at Hyatt Centric Guatemala (interior design, millwork, FF&E, delivery, and installation by L&S) This difference in scopes and end goals often results in little cooperation unless it is explicitly required or encouraged by the developer. Solving problems by approving change orders and expediting orders is the occasional remedy but cannot be modus operandi in your projects. Creating guidelines for such collaboration and fostering communication is key to avoiding scope gaps with costly consequences.

How to set yourself up for success:

1) Defining the overall project strategy, budget, and schedule, beyond just the contractor’s scope, allows all consultants to understand how and when each of their services come into play. This sets the tone for a joint mission and collaboration across the board.

2) Gathering all parties in hands on meetings throughout the life of the project helps keep transparency and awareness of what each of the parties are working on, highlighting transition points and reducing potential miscommunications along the way.

3) Establishing expectations of consultant involvement and comparing service agreements between consultants can reduce the risk of scope gaps, friction, and other negative surprises they cause.

4) Hiring an Owners Representative, whose main objective is to ensure the owner’s best interests are represented and enforced, and tasking them with monitoring the process and raising concerns in a constructive way can be a huge help.

5) Creating periodic check points with the full team to confirm the project is aligning with previously established budgets and schedules. This way the group is able to identify issues before they get too large and enforce a culture of problem solving instead of finger pointing and posturing that can halt projects and cost ownership thousands.

6) Identifying potential conflicts of interest amongst service providers to avoid cost overruns or cover-up situations as problems arise.

Depending on the magnitude and complexity of your project you might be suffering from either an excess or a lack of service providers. Carefully analyze if members of a team are complicating or facilitating flow and adding value to the project. By encouraging communication and regular meetings with the full consultant team, you can keep the team informed on how scopes of work overlap. Don't be afraid to return to your consultant contracts periodically to ensure that members are delivering fully the work they promised – “If you think it's expensive to hire a professional to do the job, wait until you hire an amateur” - Red Adair.

Choosing the right service providers might make all the difference; large and iconic firms are not always the best fit. Depending on your project size and company structure you might be better off with someone whose focus and structure reflects that of your situation. When comparing service proposals, ownership groups might seek to compare apples to apples but often times end up comparing entirely different families of fruit. Ask to see examples of working documents so you know exactly what you’re getting - or if you feel uncomfortable, spend the money and have an experienced Owner’s Representative or Project Management company assist you in comparing competitive contracts.

Every path is unique, tread carefully but without fear!

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